The official cash rate has remained at 7.25% after the Reserve Bank of Australia (RBA) board meeting on Tuesday, however, Australian homeowners could be in line for a rate reprieve as early as next month, some experts predict.
The board of the RBA this week elected to leave the official cash rate as is at 7.25%, with RBA governor Glenn Stevens indicating that a rate cut could be on the cards.
"Weighing up the available domestic and international information, the board judged that the cash rate should remain unchanged this month," he said.
"Nonetheless, with demand slowing, the board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing."
Australian Mortgage Options managing director Robert Projeski believes that relief is in sight, citing evidence of a slowing economy as the main driver.
"I think that a drop in rates would be very timely and will create a wave of consumer confidence and relief for many homeowners," Projeski said.
"We'd see an upturn in new building construction, investment confidence, rental availability and hence an easing on housing affordability."
A drop in the cash rate, providing it does get passed onto borrowers by the lenders, would stimulate consumer confidence and increase activity in the market, he added.
"In finance circles, there seems to be a feeling that a cut in official interest rates should be considered sooner rather than later, because the real flow-on effect takes approximately three quarters to see a real impact," he said.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now